A family member (the “principal”) has given power of attorney to a third party (the “agent”). The principal is now incapacitated, and you have concerns about the agent’s management of the principal’s assets. What do you do? Here are two options.
First, petition the court to require the agent to file an accounting:
An attorney in fact is in a fiduciary relationship with the principal, but only to the extent that the attorney in fact undertakes to act under the power of attorney. Among the fiduciary duties required by law, an attorney in fact has a duty to adequately account to the principal, or to any legal representative of the principal appointed by the principal or by a court, for actions taken by the attorney in fact in the exercise of the power of attorney.
Second, ask the court to have the agent bonded:
(a) The next of kin of any principal who has executed a durable power of attorney under this part may, upon the disability or incapacity of the principal, petition a court of competent jurisdiction to require a bond of the attorney in fact.
(b) If, after consideration of the interests of all parties involved, the court deems a bond necessary, it shall have the authority to order the attorney in fact to execute a bond in an amount deemed appropriate by the court.
Sources: T. C. A. §§ 34-6-106 and 34-6-107
Posted by Joel D. Roettger, JD, LLM, EPLS